We review the literature that examines how product markets and competition interact with corporate finance, and provide some ideas for future research. The main takeaway from more than forty years of research is that product market considerations have first-order effects on our understanding of...

We review the literature on the sources of financing and associated financing frictions facing small firms. Using data from the Survey of Business Owners, we first show that about half of small firms do not report using any external finance either for startup or for expansion. Among those that...

Financial statements and an accompanying NPV calculation are embedded into a binomial tree. This generalization of traditional static NPV analysis allows the financial statements to both evolve through time and, at any given time, to vary with states of the world (similar to a Monte Carlo...

Over the past ten years, private equity and venture capital have played an increasingly important role in the European economy. In parallel to the increase in investments, contribution of the private equity and venture capital industry to employment in Europe has grown.Against this background,...

Academic entrepreneurship has become an increasingly important channel through whichuniversities contribute to economic development. This paper studies academic entrepreneursusing a comprehensive venture capital database...

This paper deals with the question of whether public venture capital (VC) isperforming its task properly, taking a look at how public VC companies’ selectionprocess, investment behavior, and consulting services reflect goals that differ fromthose of private VC firms. The results present...

We investigate whether the supply of Venture Capital (VC) in Germany is driven by spatial influences. The study is based on information from more than 300 VC investments made in Germany between 2004 and 2005. We find evidence that the geographical distance between a VC company and the portfolio...

Using a data set of the firms listed on the Neuer Markt in Germany, this paper demonstrates that venture backed firms differ from firms with other financial resources, especially debt. Thus, the results of this study provide evidence for the hypothesis that small and innovative firms are more...

Using a comprehensive database of European firms, we study how private equityaffects the rate of firm entry. We find that private equity investment benefits newbusiness incorporation, especially in industries with naturally higher entry rates andR&D intensity. A two standard deviation increase...

This research investigates whether the presence of controlling founders and families has significant impact on the level of cash holdings, and their implications on firm value. The agency cost of cash holdings in founder firms is arguably less severe than family firms, due to founders' economic...